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Central Valley Project Final Cost Allocation Study, March 2018

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Central Valley Project Final Cost Allocation Study, March 2018 RECLAMATION Managing Water in the West Draft Central Valley Project Final Cost Allocation Study CENTRAL VALLEY PROJECT '\ Central Valley Project Service Areas . --~ -- Bureau of Reclamation Mid-Pacific Region January 2019 Mission Statements The mission of the Department of the Interior is to protect and provide access to our Nation’s natural and cultural heritage and honor our trust responsibilities to Indian Tribes and our commitments to island communities. The mission of the Bureau of Reclamation is to manage, develop, and protect water and related resources in an environmentally and economically sound manner in the interest of the American public. Table of Contents Page Executive Summary .........................................................................................................................1 Chapter 1. Introduction ....................................................................................................................9 Chapter 2. Overview of the Central Valley Project .......................................................................13 Chapter 3. Project Facilities and Costs ..........................................................................................19 Chapter 4. Cost Allocation Methodology ......................................................................................27 Chapter 5. Key Concepts and Assumptions ...................................................................................33 Chapter 6. Hydrological Modeling ................................................................................................43 Chapter 7. Economic Benefits .......................................................................................................51 Chapter 8. Single-Purpose Alternatives .........................................................................................61 Chapter 9. Cost Estimates ..............................................................................................................69 Chapter 10. Cost Allocation Results (Period 2) .............................................................................79 Chapter 11. Final Cost Allocation (Two-Period Merger) ..............................................................89 Chapter 12. Implementation of the Final Cost Allocation .............................................................97 CAS Facility List .........................................................................................................................101 Key Terms ....................................................................................................................................111 References ....................................................................................................................................117 List of Tables Table ES-1. Final Cost Allocation (Merge) – Construction (Nominal Dollars) ..............................3 Table ES-2. Summary of Repayment Obligations – Construction Costs Only (Excludes IDC and OM&R) ...................................................................................................................6 Table ES-3. Reimbursable Costs Distribution – Construction Costs Only (Excludes IDC and OM&R) ..........................................................................................................................7 Table 6-1. Estimated Annual Water Supply Deliveries by Water Year Type (TAF) ....................44 Table 6-2. Water Supply SPA Storage Facility Sizing (TAF) .......................................................44 Table 6-3. D-1641 Estimated Annual Water Requirements by Source and Water Year Type (TAF) ..................................................................................................................45 Table 6-4. SPA Storage Size Results for the Water Quality Purpose (TAF) ................................46 Table 6-5. Estimated Annual Power Generation and Consumption by and Water Year Type (GWh) ..........................................................................................................................46 Table of Contents | iii Table 6-6. SPA Storage Size Results for the Flood Control Purpose (TAF) .................................47 Table 6-7. Estimated Average Annual Storage Requirements Used to Meet B2 Water Supply Objectives (TAF) .........................................................................................................48 Table 7-1. Estimated Annual Economic Benefits of CVP Irrigation Water Supplies, by Water Year Type ($millions) ..................................................................................................53 Table 7-2. Estimated Annual Economic Benefits of CVP M&I Water Supplies, by Water Year Type ($millions)...........................................................................................................54 Table 7-3. Estimated Annual Economic Benefits of CVP Water Quality, by Water Year Type ($millions) ....................................................................................................................55 Table 7-4. Estimated Annual Economic Benefits of CVP Flood Control, ($millions) .................56 Table 7-5. Estimated Annual CVP Hydropower Benefits, by Water Year Type ($millions) .......59 Table 7-6. Estimated Annual Total CVP Hydropower Benefits ($millions) .................................59 Table 7-7. Summary of Estimated Economic Benefits of the CVP (2013 Dollars) ($millions) ...60 Table 9-1. Diminishable Multipurpose Facilities ..........................................................................74 Table 9-2. Non-Diminishable Multipurpose Facilities ..................................................................74 Table 9-3. SCRB Total and Separable Cost Estimates (2013 Dollars)..........................................76 Table 9-4. Total Estimated SPA Costs by Purpose1 (2013 Dollars) ..............................................78 Table 10-1. SCRB Results – Period 2 (2013 Dollars) ...................................................................81 Table 10-2. Reimbursable Purpose Allocation Percentages ..........................................................85 Table 10-3. Cost Allocation Summary – Period 2 (Nominal Dollars) 1 ........................................86 Table 11-1. Final Cost Allocation (Merge) – Construction (Nominal Dollars) ............................90 Table 11-2. Final Cost Allocation (Merge) – IDC1,2 .....................................................................92 Table 11-3. Summary of Repayment Obligations – Construction (Excludes IDC) ......................94 Table 11-4. Reimbursable Cost Distribution – Construction (Excludes IDC) ..............................95 CVP Cost Allocation Study Facility List (FY 2013) 1,2 ...............................................................101 List of Figures Figure 2-1. CVP Project Area ........................................................................................................14 iv | Draft Central Valley Project Final Cost Allocation Study List of Appendices Cost Allocation Study Spreadsheet Appendix Cost Estimate Summary Tables Appendix Economic Benefits Analysis Appendix Hydrological Modeling Appendix Public Comments Appendix Table of Contents | v This page intentionally left blank. vi | Draft Central Valley Project Final Cost Allocation Study Acronyms and Abbreviations • AF: acre-feet • BCI: Building Cost Index • BO: biological opinion • CAISO: California Independent System Operator • CAS: cost allocation study • CEC: California Energy Commission • COA: coordinated operations agreement • CVP: Central Valley Project • CVPIA: Central Valley Project Improvement Act • Delta: San Francisco Bay Delta • DWR: California Department of Water Resources • FWPRA: Federal Water Project Recreation Act of 1965 • GDP: gross domestic product • GWh: gigawatt-hour • IDC: interest during construction • km: kilometer(s) • LCPSIM: least cost planning simulation model • LTGEN: long-term generation • M&I: municipal and industrial • MCD: major cost driver • MMBtu: million British thermal units • MW: megawatt • MWh: megawatt-hour • O&M: operation and maintenance • OM&R: operation, maintenance, and replacement • OMWEM: other municipal water economics model • P&Gs: Principles and Guidelines • PG&E: Pacific Gas and Electric • Pump-Gen: pump-generating Acronyms and Abbreviations | vii • RAX: replacement, additions, and extraordinary maintenance • Reclamation: Bureau of Reclamation • RJE: remaining justifiable expenditure • ROD: Record of Decision • RPA: reasonable and prudent alternatives • SCRB: separable costs-remaining benefits • SOD: Safety of Dams • SPA: single-purpose alternative • SSJRBS: Sacramento and San Joaquin Rivers Basin Study • SWAP: statewide agricultural production model • SWP: State Water Project • SWRCB: State Water Resources Control Board • TAF: thousand acre-feet • TBD: to be determined • USACE: U.S. Army Corps of Engineers; Sacramento District • USFWS: U.S. Fish and Wildlife Service • WAPA: Western Area Power Administration • XO&M: extraordinary operations and maintenance viii | Draft Central Valley Project Final Cost Allocation Study Executive Summary The Central Valley Project (CVP) is a multipurpose water resources project operated by the Bureau of Reclamation (Reclamation) that supplies water to more than 200 long-term water contractors in the Central Valley, the San Francisco Bay Area, and the Santa Clara Valley. The CVP has seven authorized purposes: water supply, power, water quality, flood control, fish and wildlife
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